The unequal agreement signed by the interim government with the US poses a major obstacle to energy security in Bangladesh rather than the disruption in fuel imports through the Strait of Hormuz, said Debapriya Bhattacharya, a public policy analyst.
“The Strait of Hormuz is indeed an obstacle to fuel imports, but the US trade agreement is a bigger barrier,” he said at a pre-budget shadow parliamentary debate competition organised by the Debate for Democracy on Saturday.
The Agreement on Reciprocal Trade (ART) signed on February 9, just three days before the election, commits Bangladesh to purchasing $15 billion in US energy products, including LNG, over 15 years. It also restricts Bangladesh’s ability to buy cheaper fuel from countries under US sanctions such as Russia.
“The current government says it will not pursue country-specific foreign policies. Yet, that is exactly what is happening in the trade deal -- we now need permission regarding whom we can buy oil from,” said Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue.
However, Bangladesh should make the best of the 60-day waiver offered by the US on oil purchases from Russia.
While criticising the deposed government, Bhattacharya said the energy policy was confusing and controversial, with exploitative policies adopted by an unholy nexus of bureaucrats, business groups and politicians.
Instead of productive investment, priority was given to import-dependent energy strategies to serve vested interests, leading to the import of LNG instead of domestic gas exploration.
Institutions like the state-owned Bangladesh Petroleum Exploration and Production Company (BAPEX) were weakened.
There were major irregularities in energy imports, Bhattacharya said.
The government has formed a cabinet committee on energy security, but it should inform the public about its activities through transparency and bring the matter for discussion in the national parliament.
Although the government has spoken about forming a reform commission in line with its electoral promises, it has not yet been made visible.
The government should clearly disclose its plans for reforms in public financial management, revenue collection and incentives, Bhattacharya added.
While moderating the programme, Hassan Ahamed Chowdhury Kiron, chairman of the Debate for Democracy, said that due to past corruption, Bangladesh failed to achieve self-reliance in energy.
Import dependence was increased for vested interests, while domestic production was neglected.
Therefore, ensuring energy security will be a major challenge for the government in the upcoming budget, he said.
The upcoming budget must reflect the expectations of ordinary people.
During a crisis, a people-friendly, business-friendly, sustainable and cautious budget needs to be presented.
The new government, which has achieved a large mandate, must maintain its popularity by presenting a budget that ensures maximum welfare, avoids placing pressure on lower- and middle-income groups, prevents public suffering and maintains price stability.
Additionally, to keep the economy active and ensure investment and employment growth, a hassle-free business environment must be created.
Therefore, the upcoming budget must be people-oriented and practical, he said.
